Independence would not only bring the long-standing andsometimes-troubled union to an end, but allow tax cuts andinvestment focused on boosting exports to spur growth on theScottish side of the border.

In an attempt to sour support for independence ahead of aScottish referendum in September 2014, Britain's rulers haveissued a flurry of warnings in recent months about the dangersof Scotland scrapping its union with England.

Scotland, according to the British government, would havetrouble keeping the pound, its economy would be dangerouslyexposed to the vicissitudes of the oil market and its bankingsector would be vulnerable to a Cyprus-style debt crisis.

But the Scottish government hit back at those gloomy viewswith a report entitled "Scotland's Economy: The Case forIndependence" which said years of shoddy London policies hadcost Scotland 19,000 new jobs and hampered growth for decades.

"The UK government's economic policies have been holdingScotland back for generations," said Scotland's Deputy FirstMinister Nicola Sturgeon. "Only with the powers of independencecan Scotland meet its full potential."

Scotland's $190 billion economy -- roughly the size of NewZealand's -- makes up about 8 percent of the United Kingdom's$2.4 trillion economy, according to most international measuresand Scotland's own economic forecasts.

Opinion polls show about a third of Scottish voters wantindependence, while nearly 60 percent want to stay part ofBritain.

KEEP THE POUND

Scotland said that if granted independence it wanted to keepusing the British pound under a currency union arrangement andstrengthen ties with the European Union, steps which it saidcould increase exports by 50 percent over four years.

"A currency union would provide the full flexibility to varytax and spending decisions to target key opportunities andchallenges in Scotland," the report said.

It cited tourism, food and drink and manufacturing as someof the industries that would benefit from independence and thefreedom to deal directly with partners in Europe and beyond.

Opponents of independence in London have warned Scotland itwould have to renegotiate European Union membership as aseparate sovereign state and that its share of North Sea oilrevenues would also be the subject of discussion.

Alistair Darling, a Scottish politician who served asfinance minister under the Labour government between 2007 and2010, said the economic case for an independent Scotland was"totally unconvincing".

He said oil, gas and renewable energy sectors were dependenton large UK subsidies and that Scotland's financial sectorrelied heavily upon access to the rest of the British market.

The remaining oil and gas reserves of the North Sea could beworth up to $2.28 trillion according to Scottish governmentanalysis, and the report backs creating a Norwegian-style oilwealth fund to cushion the blow of any future economic shocks.

"Nothing lasts for ever but we know that oil and gasresources are going to last a long time," said Alex Salmond,Scotland's first minister and leader of the Scottish NationalParty.

An independent Scotland could attract investment by cuttingcorporation tax, simplifying regulatory structures and providingincentives for companies to invest in training their workers.

A three percent cut in corporation tax could boost economicoutput by 1.4 percent and raise employment by 1.1 percent byattracting investment over the next 20 years, the report said.

Scotland could also save money with a trimmed downregulation system compared to that of the UK, that createdgreater certainty for industries and higher levels of protectionfor consumers, the report said.